Robinhood raised $1 billion from existing investors just hours after it halted purchases of GameStop, suggesting the free-trading app faced a potential cash shortage.
The startup faced a bipartisan backlash Thursday for its decision to limit trading — a move that ran counter to its stated mission of democratizing investing.
“This is a strong sign of confidence from investors that will help us continue to serve our customers,” Robinhood said in a statement.
But the fact that Robinhood felt the need to raise so much money, just months after raising hundreds of millions of dollars, signals the financial pressure facing the company.
GameStop, AMC and other stocks have been skyrocketed in recent days, bid up by an army of traders on a Reddit message board called WallStreetBets.
This is a developing story and will be updated.